Director of Public Prosecutions v D'Agostino

[2018] VCC 1568

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted
Suitable for Publication

AT MELBOURNE
CRIMINAL JURISDICTION

CR-18-00584

DIRECTOR OF PUBLIC PROSECUTIONS

v

NICOLA D'AGOSTINO

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JUDGE:	HER HONOUR JUDGE QUIN
WHERE HELD:	Melbourne
DATE OF HEARING:	19 September 2018
DATE OF SENTENCE:	25 September 2018
CASE MAY BE CITED AS:	DPP v D'Agostino
MEDIUM NEUTRAL CITATION:	[2018] VCC 1568

REASONS FOR SENTENCE
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Subject:  Recklessly dealing with the proceeds of crime
Catchwords:
Legislation Cited:
Cases Cited:
Sentence:

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APPEARANCES:	Counsel	Solicitors
For the Director of Public Prosecutions	Mr A. Sharp	OPP
For the Accused	Mr N. Papas QC (Plea) Mr A. Condello (Sentence)	Condello Lawyers

HER HONOUR:

1NICOLA MAURO D’AGOSTINO, you have pleaded guilty to two charges of recklessly dealing with the proceeds of crime.  Each of the two charges is a rolled up charge, the first encompassing a period of time and an amount of monies as set out in the table attached to the Indictment.  Charge 1 relates to 328 individual transactions between 16 March 2012 and 15 June 2016, where a total amount of commission paid was $717,846.51 and Charge 2, 12 separate transactions on 16 January 2015, where the total commission paid was $78,427.80.  At the outset I should indicate that the prosecution case is that you received a percentage of the total of those amounts, the total being $796,274.31.

2The maximum penalty for this offence is 10 years' imprisonment.   Charge 2 is a continuing criminal enterprise offence, though such a qualification does not affect the maximum penalty – however your status as a continuing criminal enterprise offender  will be recorded.    

3By way of background it is necessary to briefly explain the practice adopted by National Australia Bank, ("NAB") as part of its mortgage lending operations, involving an introducer program (“Introducer program”).  The introducer, or registered person would refer a customer to a NAB staff member, and the remainder of the documentation and communications regarding the loan was done or completed by that staff member.  If the introduced loan proceeded, the NAB staff member was required to have the customer sign a document, acknowledging the role of the introducer.(“the confirmation document”).  Once the loan was finalised and drawn down, the introducer would be paid the relevant commission by NAB. 

4Your co-accused, Andrew Matthews, began his employment with the NAB after resigning from the CBA in August 2011.   Mr Matthews was employed as a Mobile Home Lender and was based at NAB Seaford.  He was  also the sole Director of a company named ‘Brits Enterprises Pty. Ltd.’

5Your met Mr Matthews through your wife, and you were family friends.  On 14 November 2011, you became an introducer for Mr Matthews and in December entered the relevant agreement with NAB.  

6Between January 2012 and June 2016 Mr Matthews as part of the documents he gave to clients in applying for a NAB loan, would include only the second page of the confirmation document, a two page document.    Due to the number of signatures required during a home loan, no customers picked up on what they were signing or that the first page of that document was missing.   
Mr Matthews would then incorporate that signed page with the front page, triggering a monthly commission payment to your NAB account.   

7In June 2016 an internal NAB investigation revealed that the majority of, or disproportionate amount of Mr Matthews' loans, were introduced to him by you.   Initially, for the first six months, the commission payments appear spasmodic, though thereafter, the monthly commissions paid to you dramatically increased.

8After you had received the commission Mr Matthews would invoice you, under the name “Brits Enterprises,”  90% of the commission you had received that month.  You would then transfer the funds from your account to an account related to him, which he ultimately transferred to his personal or business account. 

9The total amount of commissions paid to you by NAB was $796,274.31 – you retained approximately 10% of the value of the commissions from those payments.   Initially between March 2012 and August 2013 (total 15 events) you withdrew funds either by cash or cheque (payable for cash) totalling $92,629.   From March 2015 to June 2016 you retained 5% of the value of the commissions. During the course of the investigation it was discovered that some of the customers had in fact been referred by you and you kept the full commission.

10You therefore made $67,329.34 and disbursed the remaining $728,944.97 to Mr Matthews.  When transferring these funds you used the words ‘BRITS ‘MARKETING’ or ‘COMM’.  The details of the amounts transferred and the relevant account details are included in paragraphs 16 and 17 of the prosecution opening. 

11Investigations revealed that most of the relevant NAB customers had no knowledge of you, and were not referred to the NAB by you.  Further, customers maintained that the confirmation document had no p.1 when they signed p.2, and that the writing on p.1 was not their own. 

Arrests of accused

12On the 19th of July 2016, police executed a search warrant at Mr Matthews home.  A number of documents were seized including confirmation documents located on his computer.  He made a no comment interview and was later released without charge, though in November 2017 he was again arrested and charged.

13On the same day you attended police by appointment and were interviewed – you made admissions to the offending in relation to the NAB payment of commissions and provided details of Matthews emailing you a monthly invoice.  You were co-operative with police and released without charge.  On
22 November 2017, you were interviewed again though you exercised your right to silence and were charged.

Role

14Your role was clearly lesser than that of Mr Matthews, though you were essential for his scheme to work, as he would not have been able to direct the money back to himself on his own.  You, as an “introducer”, allowed
Mr Matthews to take advantage of his position at the NAB and  his knowledge of their system allowed him to exploit it for his own personal gain.  He dealt with the customer.  He received a substantial sum over a four year period.   He also dictated the amount that you were to receive, reducing your percentage over a period of time. 

15There are no victim impact statements filed.  The loss suffered was to the NAB whereby Mr Matthews received a significant amount of additional funds from his employer to which he was not legitimately entitled.  You also received a benefit and assisted him in his fraudulent activities which deceived  both the clients of NAB and the NAB.  It was not suggested that the loans were not otherwise legitimate or properly approved, causing further loss to the bank.

Personal circumstances

16Your personal circumstances are fully set out in the report of Patrick Newton (psychologist) dated 5 September 2018, and I take that material into account.

17You are currently aged  35 years of age and were born and raised in Australia to Italian immigrant parents.   You live with your wife and two children.  You left school at the end of Year 10 and have  mainly worked in trade-related fields, in the area of photocopiers and printers.  You are currently employed and your employers are aware of these proceedings.

18You have no prior convictions.  I received a significant number of character references from family, friends and work colleagues – you were previously of good character.  You have never had any issues with drugs or alcohol. 

19There has been some delay in the resolution of these matters since you were first interviewed – the proceedings have been hanging over your head for more than two years.  Mr Newton notes you suffer "intrusive ruminations" and "reactive distress" as a consequence of this delay and the stress on your family.  It was conceded by your counsel that these issues were not such as to give rise to the considerations detailed in Verdins.   I do take into account delay, and the uncertainty and stress you have suffered due to no fault of your own, over that period.

20As to why you became involved in this offending, as noted you were friends with Mr Matthews and met with him and his branch manager to become part of the introducer’s scheme.  You had little if any relevant experience in residential or commercial lending.  NAB provided no training, supervision, accounting or accountability in the administration of the scheme. 

21You maintained in your interview that you thought that all you had to do was to provide names and phone numbers of prospective clients and that Mr Matthews would do the rest.  When asked about why you were paying the amounts to Matthews you said you did not know there was fraud you said Q347

"… I was under the impression that they were coming from other contacts that he knew, so they weren’t mine and they weren’t able to  obtain an introducer agreement …. 349 they were putting it through me and you would get 5% for doing that …."

22You maintained throughout that you did not think you were doing the wrong thing.  Your plea was accepted on the basis that you were reckless – that is if you had turned your mind to it, you were aware, that the funds were probably not legitimately obtained.    Consistent with that view is that you paid income tax on the amount that you received as commission.

Plea of guilty /remorse

23You pleaded guilty to these matters at the first filing hearing in the Magistrates Court on 23 June 2018.  You had indicated an intention to plead to an appropriate indictment in November 2017.  It was an early plea.  I accept that your guilty plea has significantly facilitated the course of justice and has a utilitarian benefit. This offending was complex and required examination of voluminous material – you have saved the time of court proceedings and significant costs that would have been associated with the prosecution by your guilty plea. 

24I accept that your plea is also indicative of remorse.  This is further supported by your level of co-operation and character references tendered on your behalf.    At the committal mention you offered to make a statement and to give evidence against Mr Matthews.  Although your statement has yet to be finalised, you gave an undertaking to this Court that you would, if required, give truthful evidence in accordance with your record of interview against Mr Matthews.  It was not disputed by the prosecution that this will be important evidence in that prosecution.    Additionally you have consented to the making of a compensation order to NAB in the sum of the benefit you obtained or the percentage amount of the commissions.($67,329.34)

Rehabilitation prospects:

25Your counsel submitted, and the prosecution did not dispute that you had excellent prospects for rehabilitation.  I accept that assessment on consideration of the following:

the impact of these proceedings on you and your family;

no prior history and previous good character;

significant support from family and friends;

employment and good work history;

plea of guilty and remorse;

co-operation with police and undertaking to give evidence.

26Principles of specific deterrence and protection of the community are to be given lesser weight in the sentencing exercise given these features. 

27Your counsel submitted that in respect of Charge 1 that I should impose a Community Correction Order and that a substantial fine was appropriate in relation to Charge 2.  If I was minded to reject that submission and impose a term of imprisonment, that any term that I impose should be suspended.  Such an option was available to me given the between dates of Charge 1.  The prosecution conceded that given the matters put on your behalf but particularly your level of co-operation, undertaking and plea that a Community Correction Order was in the range of dispositions available to me.

28Your offending continued over a four year period – Although Mr Matthews financial benefit was significantly more than yours, you still obtained a substantial amount of money.  The fraud perpetrated by Mr Matthews involved a significant breach of trust of his employer and you played an essential part in that fraud.

29General deterrence and just punishment are important sentencing considerations.  These must be balanced against matters in mitigation, particularly your plea, remorse, good rehabilitation prospects and importantly your undertaking.

30In all the circumstance I propose to sentence you as follows:

31Charge 1 – convicted and to serve a Community Correction Order for three years.  You will be required to do 125 hours community work and there will be a condition regarding supervision

32Charge 2 – convicted and fined $1000.

33Section 6J of the Act remains in effect and his status as a "continuing criminal enterprise offender' must be noted on the records of the Court.

34I make the order for compensation of $67,329.34

35Pursuant to s.464 of the Crimes Act I make an order that you provide a sample to remain on the relevant database. If you do not cooperate with the police when that sample is taken they can use reasonable force to obtain that sample.

36Finally, pursuant to s.6AAA of the Sentencing Act if you had not pleaded guilty to this matter I would have imposed a term of imprisonment of three and a half years with a non-parole period of two years and two months. Are there any other orders that I need to make?

37MR SHARP:  No, Your Honour.

38HER HONOUR:  I will just sign all these for you now.  Mr D'Agostino, you should be aware that if you breach that order that the matter may come back before me and I will be required to resentence you in relation to these matters.  Thank you.

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